The bank has launched a new scheme, called SmartSpend, which provides things like cash back on holidays.

But retail boss Ashok Vaswani confirmed it won’t be paying ANY interest on money customers have sitting in their current account, for the time being at least.

That’s despite a number of rival banks deciding to do just that in a bid to attract new customers.

Ashok Vaswani, boss of Barclay’s retail arm, defended the decision, claiming current account holders would save more through its scheme than they’d earn in interest from others.

“Not only do I think it’s worth more, I know it’s worth more,” he told the Mirror. “You are getting a much bigger benefit back.”

The SmartSpend initiative will only be offered to the bank’s online customers, who total around 5.5million, for now, not to the majority of the bank’s 12m current account customers.

Under the scheme, Barclays will link up with third party firms to offer money off deals.

Among the first is a deal with travel giant Expedia offering up to 5% cash back on holidays book through the website.

It also has agreements on energy bills and group discounts.

But getting the savings rely on customers opting for the offer, and wanting to use the other firm.

“There will be different things we will do as we go along. We are talking to a whole load of folks,” said Mumbai-born Vaswani, who is head of a recently enlarged division encompassing retail, corporate and wealth at Barclays.

“I haven’t heard of anyone else doing anything like this.”

poll loading

What would you rather get with your bank account?

0+ VOTES SO FAR

His comments came amid heightened attention on the current account market after the Competition and Markets Authority launched a probe.

One reason was that the Big Four banks - Barclays, Lloyds Banking Group, Royal Bank of Scotland and HSBC - control 77% of the market.

Vaswani said this wasn’t a problem - and claimed the fact that only 3% of all current account holders switch provider a year is because they are happy.

He claimed: “Are we looking for a solution without there being a problem there?

“Why is the customer not switching if they are so upset? They seem to be happy, or they seem to say ok, fine, this is just the way it is.”

Barclays by numbers

branches

1560

online customers

5.5m

current account customers

12m

He added: “In a country of 60 million people, to have around 10 banks, and three or four that is dominant (is not unusual)

“It is a very competitive market.”

Vaswani was talking on the same day Barclays announced group profits dropped 7% to £3.3billion in the first six months of the year.

Barclays recently announced it was switching to cashier-less branches for the first time in its 324-year history.

More than 6,500 staff currently doing the job will be renamed community bankers.

The move is part of a radical overhaul of Barclays’ 1,560 branches.

Traditional counters with glass will gradually be ripped-out from branches, with staff armed with iPads giving advice instead.

Customers will be encouraged to use machines to pay in cash and cheques.